Sirisena Appoints Left-Liberal Reginald Cooray as Northern Province Governor

(Reginald Cooray)

By P.K.Balachandran.-14/02/2016

COLOMBO: In a progressive step welcomed by Tamil leaders, Sri Lankan President Maithripala Sirisena on Sunday appointed Reginald Cooray, an acclaimed leftist liberal and a veteran Sri Lanka Freedom Party (SLFP) politician, as Governor of the Tamil-majority Northern Province.

The 1947-born Cooray succeeds former civil servant HMGS Palihakkara, who voluntarily demitted office last week on completion of his short term fixed by an  agreement between him and the Sirisena government.

Cooray was Minister of Minor Crops Export Promotion during the Rajapaksa regime. The Kalutara district politician had also been Governor of the Western Province twice. He did not contest the parliamentary elections held in August 2015 saying that he lacked the financial resources to contest successfully.

Cooray’s re-entry into political life as Governor of the problematic Northern Province is believed to be due to the efforts of former President Chandrika Kumaratunga who heads a committee to bring about reconciliation in the island nation.

Tamils Welcome

Cooray will have the support of the Tamil National Alliance  (TNA), which has a majority in the Northern Provincial Council (NPC).   “ He is an appropriate choice. He has very liberal views,” TNA chief R.Sampanthan told Express. The  Minister of National Coexistence, Mano Ganeshan, said: “Cooray understands the Tamil question.”

A staunch defender of minority rights, Cooray told The Sunday Leader: “ In a democracy, all decisions are being taken by the majority, but the majority is not always right.”

Tackling Wigneswaran

However, despite his acceptability among the Tamils in general and the TNA in particular, Cooray may not find it smooth sailing in the North, given the radicalization of its  politics by Chief Minister C.V.Wigneswaran, who is leading a group named Tamil Peoples’ Council against the official leadership  of the TNA.

Cooray is taking up his post also at a time when the relationship between Chief Minister Wigneswaran and the Government in Colombo is at a new low.  The soft-spoken and dovish out- going Governor Palihakkara, had left the province last week without fanfare, virtually ignored by Chief Minister Wigneswaran. The CM made only a brief appearance at the party given by Palihakkara to say good-bye to his colleagues in the province.

Thajudeen killing: CCTV footage still in court custody

2016-02-16

Although one month has elapsed since Colombo Additional Magistrate Nishantha Peiris ordered the CID to send the DVDs and a CD of the CCTV footage of the vehicle in which rugby player Wasim Thajudeen travelled, to a forensic laboratory abroad for examination, they are still in Court custody. 

The Magistrate had directed the Criminal Investigations Department to send those DVDs and CD abroad for in-depth studies on January 7 this year. 

However, the CID is yet to obtain those articles relating to the case from the custody of the Court. 

Earlier, the Colombo University's School of Computing (UCSC) recommended that the video footage be examined at a well-equipped forensic laboratory abroad such as the FBI, MPS or the new Scotland Yard as the poor quality of the video footage and the UCSC's limited technical facilities to do so.

 It is reported that the footage had been recorded during the night and as such strong lights from oncoming vehicles had distorted the images. (Nirangi Abeywikcrema) 

CPA Quashes Its Own Objection To Fonseka Appointment

The Centre for Policy Alternatives‘ (CPA) foreign-funded ‘Public Interest Litigation’ and advocacy programme in jeapordy

February 16, 2016 

The CPA has suppressed the communiqué its Legal Department has drafted regarding Field Marshall Sarath Fonseka’s recent appointment to parliament as a ‘National List MP’.

Colombo Telegraph learns that CPA’s Legal Department had drafted a communiqué in line with its long-standing position against appointing persons “not included in the National List published under Article 99A of the Constitution”. However, this has since been suppressed, Colombo Telegraph learns.

In 2004 the CPA challenged the right of Ratnasiri Wickremanayake and Wijeyadasa Rajapakshe to occupy National List Seats of the UPFA as Members of the 13th Parliament, due to the fact that neither of the two were included in the National List published in the Government Gazette prior to the General Election of 2nd April 2004, under Article 99A of the Constitution. Neither had their names been included in the Nomination Papers of the UPFA.

“In addition to Article 99A of the Constitution, the Parliamentary Elections Act No. 1 of 1981 also contains certain statutory obligations that must be followed in replacing vacated parliamentary seats. In particular, CPA wished to draw the Commissioner’s attention to Section 64 (5) of the said Act, which seems to suggest that upon vacation of a national list seat, the secretary of a political party or the leader of an independent group may nominate any member of such party or group to replace the vacancy,” the CPA said at that time.

The CPA also wrote to the Elections Commissioner based on media reports to the effect the two would enter Parliament through the UPFA’s National List.         Read More

Eraj De Silva the next Secretary of BASL.! -It is the cherished dream of lawyers for good governance.

(Lanka-e-News -15.Feb.2016, 11.30PM) The lawyers  in one voice are requesting the legal fraternity to cast their votes to Eraj De Silva, Attorney at law who is contesting for the post of secretary of Sri Lanka Bar Association (BASL) at the next election to be held on  17 th February. 

It is an incontrovertible  fact that it is only an individual who stood by the historic struggle for the independence of judiciary even risking his life who deserves this exalted position , and not an individual who is an empty  baila (folk songs) singer and   wayside self aggrandising   pandal story narrator . Such a pandal story narrator needs bulbs to illiuminate himself  but  what a capable and competent secretary of a Bar Association needs is truthfulness, a clear conscience, self restraint  and who can truly show deference to the laws to illuminate his path , and of others . There are only a few  who can victoriously carry forward such a noble  struggle unrelentingly.

If there is such a rare  individual possessed of those sublime qualities among those contesting the post of secretary of the BASL this time , there  is none other than Eraj De Silva. Eraj has demonstrated to the nation  that his weapons are  truthfulness , integrity ,probity , sincerity of purpose  and meticulously respecting  the sacrosanct laws of the country.

Eraj De Silva is the son of senior most reputed lawyer Romesh De Silva. When all were slinking it was Romesh De Silva  who stood by Shiranee Bandaranaike ,a  former chief justice and boldly defended her until the end during the time when the Rajapakse regime hatched a conspiracy and expelled  her from the post of CJ  unjustly . Eraj also played a key role in the struggle to defend the ex CJ.

Eraj being the scion of such a father belonging to a rare breed of most honorable lawyers , it is no wonder he has the blessings of the entire legal fraternity , and is considered as by far and away the most suitable choice for the post of president of the BASL .

Naturally ,it is the cherished dream of the lawyers for good governance to make Eraj the next secretary of the BASL !

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by     (2016-02-15 20:21:19)

Sri Lanka faces crucial tests ahead with 

growing opposition to ETCA

Prime Minister Ranil Wickremesinghe

 Linking Sri Lanka to the global market

Monday, 15 February 2016

The proposed Economic and Technological Cooperation Agreement or ETCA has been one of the crucial economic reforms which the Government is planning to introduce, according to the Government, to deliver the promised prosperity to Sri Lankans. 

It had not been specifically mentioned as a policy by name in the manifesto which the ruling United National Party had presented to the electorate in August 2015 coaxing voters to vote it to power. However, the ETCA can be considered as one of the programs under the main economic strategy outlined in the manifesto to deliver prosperity to people. That main economic strategy consists of linking Sri Lanka to the global economy and to do so, making Sri Lanka globally competitive. 

Produce for a market that is bigger than that of Sri Lanka

What was meant by linking Sri Lanka to the global economy was further elaborated by the Prime Minister in his economic policy statement delivered in Parliament in November 2015. He said that Sri Lanka should produce for a “market bigger than the domestic market” indicating that Sri Lanka’s markets should be ‘enlarged’. 

To attain that target, he proposed to enter into trade agreements with “India and China”. The reason for singling out these two countries for having bilateral trade relationships has been due to their fast economic growth accompanied by an equally fattening middle class with an appetite for Sri Lanka’s products. 

Further, by regaining GSP+ concessions, he expressed the hope of entering the European markets as well. He had also opined that Sri Lanka should look into the possibility of partnering with Trans-Pacific Partnership Agreement, commonly known as TPPA, signed by the Pacific-rim countries recently. That agreement has enabled countries like Vietnam to get extra benefits for its garment exports, a competitor for Sri Lanka’s threatened garment industry. Partnering with TPPA is to open up all the Pacific-rim countries for Sri Lanka’s international trade.

Hence, ETCA is only one item on the long list of bilateral trade agreements which Sri Lanka is planning to sign in the period to come.

Fear of Indian professionals flooding Sri Lanka’s job markets

- See more 

A 2500 year-old culture that was!

‘Sinha Le’ organisation members

Sharmini Serasinghe-FEB 15 2016

The current wave of Sinhala-Buddhist supremacism / extremism / racism, and attempts to establish a 'Sinhala-Buddhist Raj' in Sri Lanka, if left unchecked will eventually lead to fragmentation of Sri Lanka into separate states, of the minorities. It may not happen in the immediate future, but it's a reality staring us in the face.

With the military defeat of the LTTE in 2009 Lankans, as a people, were hardly afforded the chance to breathe a sigh of relief, before the Sinhala-Buddhist extremists, in the form of Bodu Bala Sena (BBS), Sinhala Ravaya (SR) and Ravana Balaya (RB) emerged, waving the flag of Sinhala-Buddhist supremacism / extremism / racism, in the faces of the others.

Instead of nipping this sociological scourge in the bud, the then political administration gave succor to it. The endgame was to be to juxtapose the majority Buddhists and the minority communities of this land, and classify the latter as inferior. This caused and continues to cause, irreparable damage to the process of peace and reconciliation in post-war Sri Lanka.

The well-orchestrated Aluthgama riots by these extremists against Muslims in June 2014 bore all the hallmarks of the dark days of the July 1983 riots targeting Tamils, but on a smaller scale. In both instances, the law enforcement authorities looked on while the carnage took places under their very noses. Why?

Archeological ruins and edifices

With the change of political regimes in January 2015, many of us heaved a sigh of relief for different reasons. The minorities I'm sure did so hoping for a final peace, under a more inclusive administration.

For a while, the saffron robed brigades like the BBS, it seemed, had been reined in and silenced. But then, along came a new saffron robed player into the game, a clone of Ven Gnanasara Thera and his BBS, Ven Yakkalamulle Pawara Thera and his Sinhale Jathika Balamuluwa, claiming to 'safeguard the identity of the Sinhala people, and to regenerate the supremacy and pride of the Sinhala people'.

The lower-middle class Sinhala-Buddhist is a vulnerable customer, in the marketplace of such supremacist politics today. This underprivileged class of people who are alas in the majority, while struggling to make ends meet, amidst the spiraling cost of living, become easily convincible victims, of the saffron robed, fanning patriotic and supremacist fantasies, in their faces.                               

Read More

73-year-old woman abandoned near OPD

2016-02-15
A woman in her late seventies was found abandoned outside the Colombo South Teaching Hospital OPD, Hospital Director Dr.Asela Gunawardhane said.

 He said the elderly woman’s physical condition was good but was suffering from short term memory loss. 

The doctor said she was not in need of hospital treatment because she was not suffering from any serious illness. 

“We have informed the Maharagama police about her situation based on the information given by her. Incident of this nature are common here. We have to keep them in a ward for some months because no one comes to take them home. We have a social responsibility to take care of such people. If they are unwell we can keep them at the hospital and treat them, but if not we do not have the facilities to keep them here for a long time,” said Dr. Gunawardane. 

“We hope we will receive some information which will be of help,” he added.

A Way Out For SriLankan Airlines

By Sarath de Alwis –February 15, 2016

Sarath de Alwis

“We cannot solve our problems with the same level of thinking that created them” – Albert Einstein

If the government is serious about rescinding the uneconomical and extravagant re fleeting program of SriLankan airlines, the solution is staring it in the face.

The response in parliament by the Prime Minister to a question by JVP MP Sunil Handunneththi on SriLankan Airlines is a sobering reminder that this government is yet to decide its aviation policy and what it plans to do with debt ridden national carrier.

It is also a disturbing forewarning that the government is yet to evolve its strategy for global connectivity in its grand design of the western province mega polis.

On the purchase of the eight Airbus 350 aircraft the Prime Minister has said ‘the government would have to decide whether to cancel the deal or go ahead with it. He has further amplified that 1.4 million dollars would have to be paid monthly if the government went ahead with the deal.

In the interest of transparency, the government should table in parliament the precise financial implications of the re fleeting of SriLankan airlines. The accurate details of this massive transaction remains shrouded in official obfuscation.                                                                Read More

Prime Minister warn media institutions which spread racism

Feb 15, 2016

Prime Minister addressing a media in Badulla denounced an announcer in the Derana television channel who castigated a female singer as a bitch during a national day cultural function when she sang the “Danno Budunge” song in an opera tune.

“Specially the electronic media, it can be television or the radio, those belong not to the companies. The telecasting license is given by the government, therefore those belong to the public” Prime minister said.

The Prime Minister said that he would bring the heads of the Derana channel and inquire.

“I would question, whether they conducted a disciplinary action regarding the insult? Would like to render an apology or not? Following that we would take a decision. The reprimanding era of the Rajapaksa has gone. Now it is the time refinement. Have to work with responsibility”

A place for women
The Prime Minister said the international community has welcomed Sri Lanka’s effort of protecting the rights of all citizen’s and to give due respect to all people of the country by joining of the two main political parties.

He said as a first step the government has decided to give 25% women representations to the local government.

“There are 52% of women voters in the country but in the provincial and the local government level there is only a 5% representation.
The Prime Minister said the former presidents group is trying to hinder the proposal brought to increase the women representation in the parliament.

Countrywide strike threatened over FCID ‘harassing’ GMOA

GMOA Secretary questioned over booklet on Indian malpractice; its president to be summoned

By Shamindra Ferdinando-February 14, 2016, 10:38 pm 

Alleging that the government had unleashed the police on the Government Medical Officers’ Association (GMOA), its Secretary Dr. Nalinda Herath yesterday told The Island that the association had decided to launch a countrywide strike without giving notice unless harassment stopped forthwith.

Dr. Herath claimed that senior GMOA officials were being targeted in the wake of the organisation stepping up protests against the proposed Economic and Technology Cooperation Agreement (ETCA).

Dr. Herath said the GMOA and other organisations campaigning against ECTA held a major protest in Colombo last Thursday. The following day officers of the Colombo Crime Division (CCD) questioned Dr. Herath for about one hour on the publication of a book titled, Establishment of Specialist registry and introduction of an evaluation procedure for foreign medical specialists.

Dr. Herath said the book had been launched in consultation with the Health Ministry as well as the Attorney General’s Department to highlight the urgent need to prevent unqualified Indian doctors functioning here as specialists. Responding to a query, Dr. Herath said that the association wouldn’t hesitate to launch a countrywide strike.

Recently, the 4th Commerce Secretary level meeting between India and Sri Lanka took place in New Delhi and there a new framework called ETCA that would take the existing India-Sri Lanka Free Trade Agreement (ISLFTA) to the next level, was discussed. "Our proposed framework envisages exclusion of professional labour liberalization by Sri Lanka other than in two sub sectors, viz., ship builders and IT professionals," a government spokesperson said. The official said that there was no basis for GMOA’s concerns.

According to Dr. Herath, GMOA President Dr. Anuruddha Padeniya, too, was expected to be questioned by the police.

GMOA official Dr. Naveen Soysa said Indian authorities and the Sri Lankan government had fabricated a kidney transplant racket in keeping with their overall project to discredit local doctors. Obviously, ongoing investigation into some printing mistake in the booklet could certainly be part of the same project, the official added.

The GMOA intends to make representations to President Maithripala Sirisena soon after his return from an official visit to Germany. President Sirisena is scheduled to leave today (Feb. 15).

The GMOA alleged that the police had initiated the probe following a complaint lodged by an associate of a powerful minister.

Dr. Herath said the government obviously wanted to bring them to heel through intimidating key officer bearers.

33 powerful figures in Rajapaksa regime to courts soon

( February 15, 2016, Colombo, Sri Lanka Guardian) Legal action would be taken within the next few months against thirty three powerful ministers and individuals of the previous Mahinda Rajapaksa regime who have been accused of fraud, corruption and misappropriation of public money and assets says Minister Sarath Amunugama.

Among those who are accused of misappropriation, fraud and corruption are several ministers of the Maithri – Ranil government as well say reports.

Meanwhile, it is reported that FCID had completed investigations regarding these persons and sent files to the Attorney General for instructions but former Attorney General or the acting Attorney General had neglected taking any action. However, the new Attorney General is expected to take action regarding the files immediately.

Among the files that have been sent to AG by FCID are files regarding former President Mahinda Rajapaksa, former Chief Minister for Western PC Prasanna Ranatunga, former Minister Wimal Weerawansa, Shashi Weerawansa, Udya Gammanpila, Anura Priyadharshana Yapa, Namal Rajapaksa, Shiranthi Rajapaksa, Basil Rajapaksa, Dullas Alahapperuma, Gotabhaya Rajapaksa, Pavithra Wanniarachchi and S.M. Chandrasena say reports.

Navy suspends Yoshitha supporters over 'YOO7'

2016-02-15
Sri Lanka Navy suspended four Navy Sports Club players for wearing wrist bands that said "YOO7" to show solidarity with former Navy SC captain Yoshitha Rajapaksa, who has been remanded over allegations of fraud. 

Navy Spokesman Akram Alavi said the four players were suspended pending further investigations. 

Navy SC beat Army SC 32-30 in a thrilling Dialog Rugby league encounter yesterday at Diyagama. (Darshana Sanjeewa)

Basil Prints T-shirts Using Tourism Funds

- Feb 15, 2016

During the last Uva Provincial Council elections, former Economic Affairs Minister Basil Rajapaksa had given instructions to the Sri Lanka Tourism Development Authority to print 8,000 T-shirts to the value of Rs. 5.22 million promoting the United People’s Freedom Alliance (UPFA).

Sources said that the T-shirts were printed to mark the World Tourism Day which fell on September 27, 2014.

Electronic and print media were also used to promote the UPFA for the Uva Provincial Council elections to the value of Rs. 25.29 million using funds from the Sri Lanka Tourism Development Authority.

Meanwhile over 12,000 T-shirts, printed to be used by Sri Lanka at a tourism promotion event held in Russia from September 27, 2014 to October 07, 2014, have been found unused by the Tourism Development Authority.

When contacted, Tourism Minister John Amaratunga said that corruption committed by Basil Rajapaksa in the local tourism industry is being investigated and the details will be presented to the Financial Crimes Investigations Division and the Bribery Commission.

http://www.thesundayleader.lk/

Nearly 50 people killed in strikes on hospitals and schools in Syria

Residents and medics of the Syrian border town Azaz near Turkey say at least 14 civilians were killed after a strike. Turkey blames Russia for the missile attack. (Reuters)

By Loveday Morris and Erin Cunningham-February 15

People carry a stretcher amidst debris after a hospital supported by Doctors Without Borders (MSF) was hit by suspected Russian airstrikes near Maaret al-Numan, in Syria's northern province of Idlib, on February 15, 2016. (Omar Haj Kadour/AFP/Getty Images)


BAGHDAD — Nearly 50 civilians were killed in missile strikes on hospitals and two schools in northern Syria on Monday, the United Nations said, deepening the country’s humanitarian crisis despite plans for a temporary cease-fire later this week.

Doctors Without Borders said that at least seven people were killed early Monday when rockets hit a clinic that it supports in Idlib province. The group also said eight people were missing in what it called a “deliberate attack” on its facilities.

Doctors Without Borders did not say which group or military had fired the rockets; rights groups have documented numerous Russian and Syrian government strikes on hospitals and medical facilities across the country. In total, at least five medical facilities and two schools in Idlib and neighboring Aleppo province were attacked Monday, a U.N. spokesman said.

State Department spokesman John Kirby said Monday’s carnage “casts doubt on Russia’s willingness and/or ability” to stop the Syrian government from carrying out strikes on civilian targets.

In a statement Monday, Kirby urged “the cessation of hostilities that the Syrian people desperately need.”

The fresh fighting comes after Syrian regime forces — backed by Russian warplanes, Iranian troops and Iraqi militia fighters — have made significant gains against rebel forces in northern Syria in recent weeks. The advances have raised the stakes of the nearly five-year-long conflict, which already has transformed into a proxy war.

Read More

28 shot in West Bank clash with Israeli 

troops: Palestinian ministry

Israeli troops and young Palestinians clashes for three hours after army raided refugee camp for unknown reasons


Palestinians at the Amari refugee camp watch as young people and Israeli soldiers clash (AFP)

Monday 15 February 2016

Israeli soldiers raided a refugee camp in the occupied West Bank on Monday, and shot at Palestinians resulting in the injuries of 28.

Hundreds of young men from the al-Amari camp responded to the Israeli presence by throwing rocks, leaving 28 with gunshot injuries.

The Palestinian health ministry said 28 people were shot and wounded, including one in the head, during clashes in the camp, which lies at the entrance to the West Bank city of Ramallah.

A squad of around 25 Israeli soldiers arrived in the camp, located on the edge of the city where the Palestinian Authority has its headquarters, early on Monday morning. 

Palestinian security sources said the army tried to arrest an official from Palestinian president Mahmoud Abbas's Fatah party, who managed to escape.

The Israeli army did not give a reason for their raid in the camp, speaking only of "operational activity".

Once in the streets of the camp, which is home to 15,000 Palestinians, soldiers clashed with hundreds of youths who threw stones and glass bottles.

The soldiers responded by firing rubber bullets and live ammunition.

One soldier was injured by stones and needed to be aided by colleagues, according to AFP journalists on the scene.

An army spokeswoman said "dozens of rioters hurled homemade explosives and rocks at forces", although the AFP journalists saw no explosive devices.

"Forces called on the rioters to halt the assault using riot dispersal means. Upon the continued violence, the force responded, shooting towards the main instigators," the spokeswoman added.

The clashes lasted for nearly three hours before troops left the camp. Some of the soldiers were picked up by military jeeps, while others left to a nearby settlement.

Palestinians followed them, blocking the main road from Ramallah to Jerusalem for about half an hour.

Later on Monday, Israeli police said they arrested a 15-year-old Palestinian girl carrying two knives in her bag after she approached police on the edge of the Old City of Jerusalem.

"Police units at Damascus gate arrest suspicious female terrorist with knives before carrying out attack. No injuries," police spokesman Micky Rosenfeld tweeted.

The events were the latest in more than four months of violence rocking Israel and the occupied Palestinian territories.

Since October 1, 172 Palestinians, 26 Israelis, as well as an American, a Sudanese and an Eritrean have been killed in a wave of violence, according to an AFP count.

Most of the Palestinians were killed while carrying out attacks but others died during clashes and demonstrations.

- See more at: http://www.middleeasteye.net/news/28-shot-west-bank-clash-israeli-troops-palestinian-ministry-171735366#sthash.Gs3NG1vx.dpuf

Iran will defend Syria’s airspace if Damascus requests

Brigadier General Farzad Esmaili, the commander of Iran’s Khatam al-Anbiya Air Defense Base

Sun Feb 14, 2016

A senior Iranian air force commander says Iran is prepared to defend Syria’s airspace if Damascus calls for it.

Brigadier General Farzad Esmaili, the commander of Iran’s Khatam al-Anbiya Air Defense Base, made the remarks during an interview with the Tasnim news agency on Sunday.

After praising the government and people of the Arab country for their five-year battle against foreign-backed Takfiri terrorism, he stressed that any military presence in Syria without the approval of Damascus would end in nothing but "defeat.”  

The remarks were made in the wake of reports that Turkey and Saudi Arabia were preparing to launch joint military operations on Syrian soil.

Iran's domestically-built advanced supersonic Saeqeh 2 fighter jet

Instead of contemplating a ground presence in Syria, Esmaili noted, Riyadh should consider stopping atrocities in Yemen where over 8,200 people have been killed and some 16,000 more injured since March 26, 2015.

Meanwhile, Saudi Arabia has confirmed deployment of warplanes to the Incirlik Air Base in southern Turkey, claiming that the move was in line with the so-called fight against Daesh.

Saudi Foreign Minister Adel al-Jubeir has also stated that any decision for the deployment of forces to Syria would follow the will of the US-led coalition.

Turkish Foreign Minister Mevlut Cavusoglu has also said Ankara and Riyadh could launch a ground operation in Syria “if there is a strategy.”

Saudi Arabia and Turkey are widely believed to be among major sponsors of terrorist groups operating against the government of Syrian President Bashar al-Assad. 

China’s Man-Made Economic Travails

By Kumar David –February 14, 2016 

Prof. Kumar David

The economic downturn in China is serious, but different from global capitalism in the way it is unfolding, how the state is responding and in its medium turn prospects. Obviously they influence each other but it is different because the structure of the Chinese economy does not replicate Western capitalism. It is partly capitalist and partly state owned; it is a duck-billed platypus, neither mammal nor bird as I often say. Central and regional governments drive domestic decisions while the external economy is swayed by import-export markets and the fortunes of the yuan in currency exchanges. The market (household spending and property development) do have an impact – as does pervasive corruption – but the Centre dominates with directives and giant infrastructure projects. Provincial governments too invest heavily, and direct enterprises. Central control of banks is tight. Laissez faire capitalism does not lead the economy; the writ of Party and bureaucracy, not markets, runs. The state-cum-capitalist domestic economy is characterised by two words, Control & Balance.

It’s a different story in the external sector; when China’s exports have a hard time, imports also nosedive pushing global mineral, raw-material and oil producers into a spin. If confidence loss leads to capital flight and servicing central, provincial and corporate debt due to past overinvestment creates debt servicing pressure, the value of the yuan dips. China’s (mainly domestic) gross debt is 300% of GDP; too large to inflate away despite a deflationary global environment. This portends rising central and provincial government deficits.

For two decades the country has been the workshop of the world but Vietnam, Mexico, South Korea, India and others are gaining ground and competition is intensifying. Manufacturing, the heart of the economy, is contracting. Partly for this reason, and more significantly to placate stirring class pressures at home, the Party has been compelled to do the obvious; make a transition from investment led expansion to consumption geared development. China is in the throes of a transition from a mad investment and industrial export-driven rush to a domestic consumption oriented paradigm. So far consumption accounts for only 35% of output in China compared to 70% in the US.

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